The Financial Statement Amounts for the Atwood Company and the Franz

question 34

Multiple Choice

The financial statement amounts for the Atwood Company and the Franz Company as of December 31, 2021, are presented below. Also included are the fair values for Franz Company's net assets (all numbers are in thousands) . Note: Parenthesis indicate a credit balanceAssume an acquisition business combination took place at December 31, 2021. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.Compute consolidated goodwill at the date of the acquisition.

• A)$360.
• B)$450.
• C)$460.
• D)$440.
• E)$475.

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Definitions:

Primary Liability

The main or first layer of responsibility for fulfilling a financial or legal obligation.

Secondary Liability

Legal responsibility that arises from aiding, facilitating, or contributing to a wrongful act committed by another party.

Contractual Liability

This is the legal obligation parties have under a contract to fulfill the terms of the agreement.

Warranty Liability

The legal obligation of a seller to ensure that the goods or services sold meet certain expressed or implied standards of quality and reliability.